Rockland attorney Jesse D. Rutter improperly used more than $250,000 in clients’ trust funds for personal expenses, according to an affidavit a former paralegal of his firm filed with the Maine Board of Overseers of the Bar.
That led the board to immediately petition the Maine Supreme Judicial Court to suspend Rutter from practicing law in Maine. The state supreme court responded with an order on Aug. 20 to immediately suspend attorney Rutter.
The decision assigned to District Court Judge Michael Duddy ruled that Rutter had committed multiple violations of the Maine Rules of Professional Conduct.
“The Court found that Rutter’s violations posed imminent injury to clients, the public, and the administration of justice,” the order states.
The court suspended Rutter from the practice of law in Maine, required him to cease acting in any fiduciary capacity and appointed a court-ordered receiver (Mara King, a special counsel to the Board of Overseers of the Bar) to wind down Rutter’s practice and protect the interests of clients.
Further disciplinary proceedings against Rutter shall continue before the Maine Supreme Judicial Court.
The order came after a petition was filed with the court by the Maine Board of Overseers of the Bar. The order notes that an affidavit was filed by Maureen Griffin, a former paralegal of the firm. She had resigned on Aug. 18, citing Rutter’s action as well as working conditions.
The violations cited sections of the Rules of Professional Conduct that include that a lawyer not commit a “criminal or unlawful act that reflects adversely on the lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects” Another section makes reference to safekeeping of clients’ properties including trust accounts.
Griffin stated in her affidavit that Rutter asked on several occasions to have money from trust accounts transferred to the law firm’s operating account. Rutter would then use the firm’s credit card for personal expenses and pay those bills using the firm’s operating account, which had been funded by the transfer from the clients’ trust accounts.
She estimated more than $250,000 had been used in this way.
She said recently Rutter asked Griffin to write a check for $109,000 to MaineCare, the state’s Medicaid program, from the firm’s account but there were insufficient funds. He then instructed her to write a check from an estate account while was away on vacation. She refused and told him to take back the checkbook assigned to the estate’s account, according to the affidavit.
The identity of the estate was not listed in the affidavit.
She told the board in her written statement that there were three sources of money that Rutter could use for the MaineCare payment. Those were $300,000 from one account, another was $300,000 once an estate property was sold, and the third was $700,000 to pay off a builder once a property transfer is closed.
The paralegal said Rutter also altered reports provided to the firm’s accountants for tax purposes. She said he also added her name without her permission to reports filed with the Internal Revenue Service. Rutter said he did not want to add managing partner Steve Hanscom to the reports. She said she told Rutter to take her name off the IRS reports but he did not. She said the firm’s 1099-S filings (tax forms for real estate transfers) were behind by several years.
The affidavit also stated that she was worried that Rutter is president of the Rockland Cemetery Association and has access to more than $12 million from its accounts, as well as millions of dollars in accounts from the North Haven Foundation. That nonprofit account supports education for students and residents of the island.
The high court order requires Rutter to immediately vacate his office and turn over all files and keys to the court-appointed special counsel. A sign on the door of the School Street law firm noted that the office is closed. The law office is also the office for the Rockland Cemetery Association.
He must also “immediately relinquish any position as a designated fiduciary. Rutter (and his agents or associates) is prohibited from accessing any accounts not personal to him including the Rockland Cemetery Association, The North Haven Foundation, and any other accounts for other community and/or volunteer organizations wherein he serves as a fiduciary or registered agent. Rutter shall immediately take stops to pursue any discharge from courts, tribunals, or entities that have recorded such fiduciary service.”
Rutter has been with the Rockland law firm of Hanscom, Collins & Rutter PA since 2018, according to the firm’s website.
Rutter received his Bachelor of Arts in economics from The College of the Holy Cross in Worcester, Massachusetts. He graduated with distinction in 2005 from St. John’s University School of Law in Queens, New York, according to his biography.
His legal career began as an assistant district attorney with the Queens County district attorney’s office. While an assistant district attorney, he prosecuted various types of misdemeanor and felony offenses including domestic violence, drug and firearm offenses, driving while intoxicated, assaults, and thefts. He also worked closely with the New York City Police Department on large-scale drug and firearm investigations.
In 2009, Rutter moved into private practice and was eventually named partner in a prestigious insurance defense firm on Long Island, according to his biography on the firm’s website.
Rutter’s practice at Hanscom, Collins & Rutter focuses on real estate matters for buyers, sellers, and lenders, landlord-tenant issues, estate planning, and administration and business law.
The law firm was founded in 1901 by attorney Alan Bird. The firm later included Samuel Collins who also served as Maine Senate majority leader in the early 1980s and later served as a justice on the Maine Supreme Judicial Court.
This story appears through a media partnership with Midcoast Villager.